Ethics codes
the regulatory norms of a globalized society?
pp. 191-222
in: Arend Soeteman (ed), Pluralism and law, Berlin, Springer, 2001Abstract
This paper begins by examining the conditions under which self regulation guided by ethics codes might effectively supplement the law in regulating international commerce. Ethics codes have not had a decisive impact on corporate conduct to date, I argue. However, what the emergence of ethics codes demonstrates is a wide spread international consensus that corporations do have obligations that extend from obeying the law, to respect for fundamental labour and human rights. Can this consensus be given a theoretical grounding? Certainly not by appealing to currently dominant business paradigms grounded on shareholder and agency theories of management. Not only do these theories fail to account for the view that multi national enterprises do have public or social responsibilities, they are unable to explain or justify the minimalist view they all endorse namely that corporations have at the minimum an obligation to obey the law.Part 2 of the paper then explores the relation between the modern corporation and the law. I argue that by constituting itself an investor owned corporation under the law, a corporation enters into a partnership with the state that includes a categorical commitment to work within the constraints of the legal framework that makes its existence possible. It follows that corporations do not stand apart from society as distinct self-constituting and self-justifying organizations. The function of corporations cannot be defined independently of the intentions of their co creators. These intentions. I argue, must include an understanding that corporate activity will contribute to the public good. They find their expression in what might best be described as social contracts that set out the contours of public expectations for corporate behaviour.In Part 3. I explore reasons for thinking that by undermining the capacity of the modern state to regulate corporate activity, globalization has created a pressing need to rethink the way in which commercial activity in global markets will be regulated. This task, will require a central role for coherent and comprehensive codes of ethics. Designing those codes and their effective implementation will require a collaborative, tripartite partnership involving corporations themselves, governments and civil society.